Absolutely brutal - 5/5

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Jack Jones
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Re: Absolutely brutal - 5/5

Post by Jack Jones » Tue Jun 07, 2022 6:48 pm

Desert wrote:
Tue Jun 07, 2022 12:37 pm
Kbg wrote:
Fri Jun 03, 2022 5:42 pm
Hal,

I'd be careful on stating anything can be considered "optimal" for gold. Mathematically/historically, the start date swings "optimal" a huge amount to include you shouldn't touch the stuff. What this tells you is the asset is unstable, generally unpredictable and is susceptible to strong trends.

The only thing I'm comfortable saying is somewhere between 5 and 25...and which extreme you pick one should just fess up and say "it's because they like or can hardly stomach gold but they will tolerate a bit of it." As to how risk is normally measured, it's a pretty tough argument to make that gold buys down risk or reduces volatility. Over most start dates, gold reduces sharpe.

I'm speaking to portfolio allocation and not for other reasons one may want to hold it.
I just now saw this post, and I agree with Jack that it's a great one.
This is a good post, but to be fair, it was joypogs earlier post in the thread that I nominated for POTY. When is the award ceremony for that, again? O0
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Re: Absolutely brutal - 5/5

Post by Desert » Wed Jun 08, 2022 10:09 am

Jack Jones wrote:
Tue Jun 07, 2022 6:48 pm
This is a good post, but to be fair, it was joypogs earlier post in the thread that I nominated for POTY. When is the award ceremony for that, again? O0
Argh, and it was obvious too. That's what I get for multitasking!
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Re: Absolutely brutal - 5/5

Post by Kbg » Wed Jun 08, 2022 11:21 am

Desert wrote:
Tue Jun 07, 2022 12:37 pm
Much of the HBPP's low volatility and steady returns can be attributed to its allocation of 25 percent equity, and the remainder in fixed income and other stuff (gold).
This is exactly the case. The equity portion is hands down the driver for both performance and risk.

One simple thing I've observed (and I think I've posted as well but don't recall where)

Dial the equity nob, then just divide bonds and gold in half for the rest. If you are a gold hater or lover then after the equity knob adjustment, dial the gold/bond ratio to preference...and this second adjustment really isn't going to be much of a driver overall and particularly as compared to the first.

In short...it's the equity slice that matters. The rest really is just padding in the cage.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jun 11, 2022 2:57 am

Brutal week

Pp down 10.17%

Insight model down 9.1%

Wellesly down 8.77%

So pp still getting hit the hardest but all pretty close
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jun 11, 2022 3:00 am

Kbg wrote:
Wed Jun 08, 2022 11:21 am
Desert wrote:
Tue Jun 07, 2022 12:37 pm
Much of the HBPP's low volatility and steady returns can be attributed to its allocation of 25 percent equity, and the remainder in fixed income and other stuff (gold).
This is exactly the case. The equity portion is hands down the driver for both performance and risk.

One simple thing I've observed (and I think I've posted as well but don't recall where)

Dial the equity nob, then just divide bonds and gold in half for the rest. If you are a gold hater or lover then after the equity knob adjustment, dial the gold/bond ratio to preference...and this second adjustment really isn't going to be much of a driver overall and particularly as compared to the first.

In short...it's the equity slice that matters. The rest really is just padding in the cage.
If it was only about equities then wellesly at 40% should be in last place yet it is out performing the othe 25% models
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Re: Absolutely brutal - 5/5

Post by Kbg » Sun Jun 12, 2022 7:24 pm

mathjak107 wrote:
Sat Jun 11, 2022 3:00 am
If it was only about equities then wellesly at 40% should be in last place yet it is out performing the othe 25% models
Not sure I'm tracking your point here.

At the end of the day a backtest is a reflection of the historical record and nothing more. How assets actually perform today/in the recent history is due to what is going on economically and the expectations of the sum total of market participants. In the 2008/09 draw down a 40% (20% each the remaining) PP performed better than Wellesley. So your point, was not a point.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Mon Jun 13, 2022 7:37 am

My point was in response to your point that the equity slice is all that matters .


But with the pp that isn’t the case as Tlt is down more than stocks… and welleslys 40% equity holding has the fund down less overall , then the 25% equity holding pp is overall.

The pp is acting like it is 75% equities in this down turn as 3 out 4 assets get hit hard
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Re: Absolutely brutal - 5/5

Post by Kbg » Mon Jun 13, 2022 9:29 am

What I said was the equity slice largely drives performance and risk which isn’t even debatable in general…but yep it sucks when everything is down (really 4/4 are down in real terms).
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Re: Absolutely brutal - 5/5

Post by glennds » Mon Jun 13, 2022 10:32 am

I admit it's taking some discipline, but I'm trying to resist passing judgment on the PP's current performance until later this year.
The reason - IIRC even in 2008 when equities crashed, it took some time before bonds, then gold rallied. For a short while, all four buckets were down.
Is it fair to use a visual of a group of four tumbler wheels? They don't move immediately. One slows or moves backward, and it takes the market some reaction time for one or more of the other wheels to start spinning.
I expect (hope?) by Fall, we might see a gold rally.
Don't really know what to say about bonds though. There could be a flight to safety long bond rally. Especially if global instability persists.

In my case I've decided I am where I am. I can't find anything better to buy. Hoping to ride it out. Thread title checks out.
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Re: Absolutely brutal - 5/5

Post by gospodin_i » Mon Jun 13, 2022 10:36 am

ppnewbie wrote:
Mon Jun 06, 2022 4:41 pm
dualstow wrote:
Mon Jun 06, 2022 7:01 am
ppnewbie wrote:
Mon Jun 06, 2022 1:05 am
It’s also fun to try to replicate an HBPP in two components Wellesley and gold OR Wellington and gold.
It’s a cool portfolio, but how is that replicating the HBPP? That’s like replicating a pizza with a bowl of spaghetti and meatballs. Also a fine dish, but not the same.
Gold, Stock, Bonds, Short term bonds maybe act like cash.

Screen Shot 2022-06-06 at 2.40.16 PM.png
Long time lurker here and I just have to ask — what is the software that you took the screenshot from? I've been looking for something like this forever
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Mon Jun 13, 2022 10:38 am

but the pp is still not that far from other comparable models .

like i said it my be disappointing since the pp battle cry has been wait until stocks fall and when they did the pp wasnt helped by its safety assets compared to other conservative models .

i havent tracked the dalio all weather in a while but i should see how that is standing up
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Re: Absolutely brutal - 5/5

Post by dualstow » Mon Jun 13, 2022 10:40 am

gospodin_i wrote:
Mon Jun 13, 2022 10:36 am
ppnewbie wrote:
Mon Jun 06, 2022 4:41 pm
Gold, Stock, Bonds, Short term bonds maybe act like cash.
Screen Shot 2022-06-06 at 2.40.16 PM.png
Long time lurker here and I just have to ask — what is the software that you took the screenshot from? I've been looking for something like this forever
From the filename, I’d say it just looks like MacOS’s in-house utility. Right, ppnewbie?
EDIT: Sorry, i answered as if you were asking what he took the screenshot with. O0
let 2022 be the year of GOLD
Thinking of a few pp forum members as I read about the sound of pickleball annoying the neighbors O0 (WSJ)
There’s also an amusing article about buying iBonds in the WSJ
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Re: Absolutely brutal - 5/5

Post by glennds » Mon Jun 13, 2022 10:42 am

mathjak107 wrote:
Mon Jun 13, 2022 10:38 am
but the pp is still not that far from other comparable models .

like i said it my be disappointing since the pp battle cry has been wait until stocks fall and when they did the pp wasnt helped by its safety assets compared to other conservative models .

i havent tracked the dalio all weather in a while but i should see how that is standing up
Further to my point above, you're expecting immediate response between the negatively correlated assets. That's not how it's worked historically.
Conduct your comparisons, but I think you should keep updating them for the next 3-6 months before passing judgment.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Mon Jun 13, 2022 10:49 am

glennds wrote:
Mon Jun 13, 2022 10:42 am
mathjak107 wrote:
Mon Jun 13, 2022 10:38 am
but the pp is still not that far from other comparable models .

like i said it my be disappointing since the pp battle cry has been wait until stocks fall and when they did the pp wasnt helped by its safety assets compared to other conservative models .

i havent tracked the dalio all weather in a while but i should see how that is standing up
Further to my point above, you're expecting immediate response between the negatively correlated assets. That's not how it's worked historically.
Conduct your comparisons, but I think you should keep updating them for the next 3-6 months before passing judgment.
i can easily track them and will .

i am not passing judgement . i am simply calling it as the ytd reflects
Last edited by mathjak107 on Mon Jun 13, 2022 10:50 am, edited 1 time in total.
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Re: Absolutely brutal - 5/5

Post by vnatale » Mon Jun 13, 2022 10:49 am

gospodin_i wrote:
Mon Jun 13, 2022 10:36 am

ppnewbie wrote:
Mon Jun 06, 2022 4:41 pm

dualstow wrote:
Mon Jun 06, 2022 7:01 am

ppnewbie wrote:
Mon Jun 06, 2022 1:05 am

It’s also fun to try to replicate an HBPP in two components Wellesley and gold OR Wellington and gold.


It’s a cool portfolio, but how is that replicating the HBPP? That’s like replicating a pizza with a bowl of spaghetti and meatballs. Also a fine dish, but not the same.


Gold, Stock, Bonds, Short term bonds maybe act like cash.

Screen Shot 2022-06-06 at 2.40.16 PM.png


Long time lurker here and I just have to ask — what is the software that you took the screenshot from? I've been looking for something like this forever


If you are using a Windows based computer you could always use "Snipping Tool", which I use many times each day.
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Re: Absolutely brutal - 5/5

Post by flyingpylon » Mon Jun 13, 2022 10:56 am

gospodin_i wrote:
Mon Jun 13, 2022 10:36 am
ppnewbie wrote:
Mon Jun 06, 2022 4:41 pm
dualstow wrote:
Mon Jun 06, 2022 7:01 am
ppnewbie wrote:
Mon Jun 06, 2022 1:05 am
It’s also fun to try to replicate an HBPP in two components Wellesley and gold OR Wellington and gold.
It’s a cool portfolio, but how is that replicating the HBPP? That’s like replicating a pizza with a bowl of spaghetti and meatballs. Also a fine dish, but not the same.
Gold, Stock, Bonds, Short term bonds maybe act like cash.

Screen Shot 2022-06-06 at 2.40.16 PM.png
Long time lurker here and I just have to ask — what is the software that you took the screenshot from? I've been looking for something like this forever
The screenshot is from Portfolio Visualizer's backtest tool: https://www.portfoliovisualizer.com/bac ... allocation
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Re: Absolutely brutal - 5/5

Post by dockinGA » Mon Jun 13, 2022 12:31 pm

glennds wrote:
Mon Jun 13, 2022 10:32 am
I admit it's taking some discipline, but I'm trying to resist passing judgment on the PP's current performance until later this year.
The reason - IIRC even in 2008 when equities crashed, it took some time before bonds, then gold rallied. For a short while, all four buckets were down.
Is it fair to use a visual of a group of four tumbler wheels? They don't move immediately. One slows or moves backward, and it takes the market some reaction time for one or more of the other wheels to start spinning.
I expect (hope?) by Fall, we might see a gold rally.
Don't really know what to say about bonds though. There could be a flight to safety long bond rally. Especially if global instability persists.

In my case I've decided I am where I am. I can't find anything better to buy. Hoping to ride it out. Thread title checks out.
Good post, and excellent perspective. Also, I think there was a time in March 2020 when everything was down at the same time as well, before EVERYTHING sprung back quickly. I think LTT's were first up off the mat that time (or maybe they were the only thing that held steady, I can't remember). Regardless, things looked very bleak indeed before things quickly sprung back to life. If this is the popping of the everything bubble, who knows where we end up or how long it will take to get there.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Mon Jun 13, 2022 1:28 pm

March I think was very different as deflation was the fear from a shut down economy not inflation..

The wild card is how high can inflation go before the house of cards collapses
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Re: Absolutely brutal - 5/5

Post by gospodin_i » Tue Jun 14, 2022 2:19 am

flyingpylon wrote:
Mon Jun 13, 2022 10:56 am
The screenshot is from Portfolio Visualizer's backtest tool: https://www.portfoliovisualizer.com/bac ... allocation
This is what I was looking for — thank you!
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Re: Absolutely brutal - 5/5

Post by I Shrugged » Tue Jun 14, 2022 8:43 pm

I’m down about 16% ytd, just rough calculation.

It feels crappy.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Wed Jun 15, 2022 3:31 am

mathjak107 wrote:
Mon Jun 13, 2022 10:38 am
but the pp is still not that far from other comparable models .

like i said it my be disappointing since the pp battle cry has been wait until stocks fall and when they did the pp wasnt helped by its safety assets compared to other conservative models .

i havent tracked the dalio all weather in a while but i should see how that is standing up
so i looked at the ray dalio all weather portfolio.

that is down the most at minus 16.88% ytd

vs pp at minus 13.67

vs wellesly minus 11.43
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jun 18, 2022 3:19 am

Just an awful week

Pp down 12.88% ytd , cagr the last 10 years 4.30%

Fidelity monitor income model down 11.31 , 4.71% the last 10 years

Wellesly 11.67% 40% equities . 5.93% the last 10 years


Ray dalio all weather is doing the worst , down 16.12..

5.31% the last 10 years .

Vti for comparison 12.38% the last 10 years so one could actually be down 50% and still be ahead of them all..

Correction: that being down 50% is from now, which means you would already be down 20% .so huge difference
Last edited by mathjak107 on Sun Jun 19, 2022 5:51 am, edited 2 times in total.
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Re: Absolutely brutal - 5/5

Post by joypog » Sat Jun 18, 2022 8:52 am

The 10 year CAGR is a good addition, gives more context. I appreciate the weekly updates.
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Re: Absolutely brutal - 5/5

Post by jalanlong » Sat Jun 18, 2022 10:48 pm

Kbg wrote:
Mon May 16, 2022 4:18 pm
jalanlong wrote:
Mon May 16, 2022 2:57 pm
dualstow wrote:
Thu May 12, 2022 9:32 pm
Bitcoin is just too young and Harry was wise. Even though he would probably have been fascinated by it, I can’t imagine that he would have recommended crypto to investors depending on his sage advice, let alone telling people to put in in a portfolio of “money you can’t afford to lose.”
Bitcoin supporters (esp those in places like Canada) would say that Bitcoin can be for "money you can't afford to lose" when the government decides to start freezing or seizing financial assets without any due process because you have the wrong views on certain topics.
As opposed to the safety provided by private vendors who lose just a couple hundred mil here and there to the occasional hack. :o
Well like gold, if you dont hold it in a private vault then you probably dont own it.
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Re: Absolutely brutal - 5/5

Post by Jack Jones » Sun Jun 19, 2022 5:48 am

jalanlong wrote:
Sat Jun 18, 2022 10:48 pm
Kbg wrote:
Mon May 16, 2022 4:18 pm
jalanlong wrote:
Mon May 16, 2022 2:57 pm
dualstow wrote:
Thu May 12, 2022 9:32 pm
Bitcoin is just too young and Harry was wise. Even though he would probably have been fascinated by it, I can’t imagine that he would have recommended crypto to investors depending on his sage advice, let alone telling people to put in in a portfolio of “money you can’t afford to lose.”
Bitcoin supporters (esp those in places like Canada) would say that Bitcoin can be for "money you can't afford to lose" when the government decides to start freezing or seizing financial assets without any due process because you have the wrong views on certain topics.
As opposed to the safety provided by private vendors who lose just a couple hundred mil here and there to the occasional hack. :o
Well like gold, if you dont hold it in a private vault then you probably dont own it.
I've been feeling worse about my paper gold lately. I really question the value of it at all. I fear that I'm largely deceiving myself by thinking my gold allocation is where it is.

If we want the risk/returns of paper assets, then stocks fit the bill. If we want SHTF insurance, an off-the-books-asset, hard money, an asset that is no one else's liability, then that's physical gold. A combination of the two is an abomination and is not needed in modern times. Paper gold is like stocks w/out the upside.

Conspiracy theory: does the existence of paper gold suppress the price of gold? It seems plausible to me. I'm sure there is some degree of fractional reserve going on somewhere in the world, and that reduces the demand for the real thing.

Back to Bitcoin: since it is a digital-native asset, you are never in a position where you have to trust that someone has the Bitcoin they say they do. Reserves can be cryptographically audited:

https://www.kraken.com/en-us/proof-of-reserves

This would be like mathematically proving that all the gold bars are there in the vault, and they are all 100% gold. This is prohibitively expensive in the gold case.
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